Internet Marketing is NOT MLM

Sometimes it’s just a pain to explain to someone who thinks that internet marketing is the same as mlm or network marketing. Just because they both contain the word ‘marketing’ doesn’t mean they’re one and the same. In my side of the globe, even worse, some think that internet marketing is a pyramid or ponzi scheme.

Before I rant on and on with this topic, I’d like to clarify and give some points and share some views on internet marketing and MLM (multi-level marketing or network marketing).

Here’s wiki’s definition on Internet marketing:

Internet marketing, also referred to as i-marketing, web marketing, online marketing, or eMarketing, is the marketing of products or services over the Internet.

The Internet has brought many unique benefits to marketing, one of which being lower costs for the distribution of information and media to a global audience. The interactive nature of Internet marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. Internet marketing is sometimes considered to have a broader scope because it not only refers to digital media such as the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems.

Internet marketing ties together creative and technical aspects of the Internet, including design, development, advertising, and sale.

Internet marketing also refers to the placement of media along different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies. In 2008 The New York Times working with comScore published an initial estimate to quantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the hits from advertisements served from advertising networks, the authors found the potential for collecting data upward of 2,500 times on average per user per month.[1]

Wiki on MLM:

Multi-level marketing (MLM), is a form of Network Marketing (however the terms are often used interchangeably). It is a marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company. The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.[1]

Independent, unsalaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, sales consultants, consultants, independent agents, etc.), represent the parent company and are awarded a commission based upon the volume of product sold through each of their independent businesses (organizations).

Independent distributors develop their organizations by either building an active customer base, who buy direct from the parent company, or by recruiting a downline of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the parent company at wholesale price.

Distributors earn a commission based on the sales efforts of their organization, which includes their independent sale efforts as well as the leveraged sales efforts of their downline. This arrangement is similar to franchise arrangements where royalties are paid from the sales of individual franchise operations to the franchisor as well as to an area or region manager. Commissions are paid to multi-level marketing distributors according to the company’s compensation plan. There can be multiple levels of people receiving royalties from one person’s sales.

With internet marketing, you can sell your own product(s) or services or be an ‘affiliate’ in marketing other peoples’ products/services online. By being an ‘affiliate marketer’, i.e. selling other peoples’ products or services, you get a commission from every sale you make. So that’s basically how you can earn as an internet marketer online.

The upside is you can start with just a few hundred dollars to get started ($100-500) or you can even use the net’s free resources to jump start your business for free. Although you can do this just to test your market, in the long run, you need to get your own domain and hosting. You’ll be glad you did.

The hard part is finding the right ‘niche’ that will gobble up your offers. It takes time to gain trust from your readers i.e. if you have a blog or site that you post your offers to. And if you don’t have the right amount of traffic and competition is fierce, then it’s going to be a long uphill climb before you can even find success, if at all.

If you’re just starting out, you need to get that much needed traffic to convert into sales. If you’re looking for instant riches then internet marketing is not for you.

To put it simply –

• First and foremost is to find the right ‘niche’ and know your competition; the right mix is when you have high demand for the product and low competition from other sites. Get this wrong and you’ll just be running around in circles.

• Get targeted traffic and convert that into sales. You need to know traffic generation techniques such as posting ads, articles, forums, ppc, etc. to get people to visit your site or landing page

• Throw in an opt-in feature so you can build a list and really get to know your readers, gain trust and authority so you can use e-mail marketing to further promote offers that you find can help your visitors succeed in making money online even if they don’t visit your site regularly.

If you do everything right with all of the above, then you can succeed with making money online as an internet marketer.

I’m not really a fan of mlm but I’ll just point out a few experiences I had with it.

You earn from direct selling of a company’s products to a buyer and/or downline (recruits) and earn commissions from selling the products as well as getting new recruits that would distribute the same.

You are given a starter kit that would cost from as low as $10 to as high as a thousand dollars depending on the product and/or maybe a membership fee.

What I don’t like about mlm – they don’t really tell you how hard mlm really is if you’re not a salesperson. It’s when after they snag you with the starter kit or membership fee that you’ll find that it’s not all that easy to get people to buy their product(s).

They razzle and dazzle you with the huge profits you’ll get with the so called leverage strategy (left and right downline commissions plus sales - look at the pic above, imagine if you can have that many people as your downline, can you see the dollar signs in your eyes?). And if you’re a bit greedy, then you readily buy in to that dream and get that starter kit and pay up the membership fee. It’s only then that you’ll be faced with the reality that if you have no sales background whatsoever, it’s going to be difficult.

They are not really transparent on this from the get go so I’ll just point out what you really need from the start to even your chances for success.

• Unless you have a MILLION friends or prospects that you can convince to recruit or sell products to right from the very start, you’ll surely be disappointed,

• You are generally a people person and have a gift of gab of being able to sell ice to an Eskimo,

• You have more than enough extra cash for future meetings with potential buyers or recruits, since you’re a ‘business owner’, you shoulder ALL costs and expenses

• You can generally read a person if he/she is really interested and a potential self motivated downline so that your efforts won’t be just a waste of time

• You personally use the product(s) and are satisfied with using it so you can be a walking billboard for the business

If you don’t have all or majority of the above, especially the first one, your chances of success with mlm is slim to none.

Here’s a heads up in choosing an mlm company:

• Know exactly what products the company is selling. If there’s no product just recruitment commissions, then that’s not a legit mlm company.

• If you’re not comfortable in selling the items that they have, then it’s not for you.

• Always see to it that the company has a proven track record in direct selling. If it has been in the industry for at least 10-15 or more years then you can safely say that it won’t belly up in the first sign of trouble.

• Know how you can personally track your sales especially from your downlines.

• And lastly, your sponsor or upline should be more than willing enough to find time to teach you the ropes. If he/she disappears after getting his/her commission, then that’s a red flag and not a good sign of things to come.

Ok, one last rant…. What I really abhor is that some in mlm even quote that Robert Kiyosaki earned his riches from mlm! Well, that’s just crap! If they even bothered to read his book – “Rich Dad, Poor Dad”, yes he went into mlm. But he only got into it because he was a shy person and wanted to overcome his shyness in selling. He finally conquered his shyness but mlm did not make him rich as such.

It was his knack for flipping houses (at one point in his life) and looking for the right investments to put his money into that made him rich. He got residual income from his investments that in time gave him the freedom to retire early in life.

This is getting to be a long post, so to recap, whatever it is you choose from either internet marketing or mlm, being properly informed on each of their pitfalls and the strategies you have to do to succeed and carefully aligning your skills to adopt which marketing route to take, can greatly increase your chances for success compared to just going in blind.

With the right information, execution of the system and focusing on your goals, it will just be a matter of time before you reap your rewards as successful marketer be it an internet marketer or a multi level marketer.

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